OPEC+ has announced a surprise 1.6 million barrel-a-day cut in oil production, effective May through the end of the year, sending shockwaves throughout global energy markets. The move, aimed at supporting Brent crude futures and US benchmark WTI, is expected to lead to higher gas prices across the United States.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's decision is set to reignite concerns about inflation, particularly in the US. "I think OPEC is reawakening the inflation monster," he said. The White House may be under pressure to respond to this development, with Kloza predicting that gas prices could surge by up to $3.80 to $3.90 in a relatively short period.
US drivers are already bracing for higher costs, with Monday's national average gasoline price standing at $3.51 per gallon, according to AAA. The RBOB wholesale gasoline price has risen by about 8 cents, or 3%, in morning trading. Kloza believes that prices were getting close to pre-pandemic levels and notes that a hurricane or other storms affecting production along the Gulf Coast could push prices even higher.
While it's unlikely that gas prices will reach the record-high $5.02 per gallon seen on June 14, 2022, there is still potential for significant price increases in the coming months. Kloza estimates that US drivers won't see prices drop back to year-earlier levels until at least late summer, assuming no major disruptions to global energy markets.
It's worth noting that OPEC+ has shown its ability to cut production, and with the group seemingly motivated by their decision, it may prove challenging for them to reverse course. The fact remains, however, that even with higher oil prices, the US is likely to see gas prices below pre-pandemic levels, thanks to a strong domestic energy sector and additional releases from the Strategic Petroleum Reserve.
According to Tom Kloza, global head of energy analysis for OPIS, which tracks gas prices for AAA, OPEC's decision is set to reignite concerns about inflation, particularly in the US. "I think OPEC is reawakening the inflation monster," he said. The White House may be under pressure to respond to this development, with Kloza predicting that gas prices could surge by up to $3.80 to $3.90 in a relatively short period.
US drivers are already bracing for higher costs, with Monday's national average gasoline price standing at $3.51 per gallon, according to AAA. The RBOB wholesale gasoline price has risen by about 8 cents, or 3%, in morning trading. Kloza believes that prices were getting close to pre-pandemic levels and notes that a hurricane or other storms affecting production along the Gulf Coast could push prices even higher.
While it's unlikely that gas prices will reach the record-high $5.02 per gallon seen on June 14, 2022, there is still potential for significant price increases in the coming months. Kloza estimates that US drivers won't see prices drop back to year-earlier levels until at least late summer, assuming no major disruptions to global energy markets.
It's worth noting that OPEC+ has shown its ability to cut production, and with the group seemingly motivated by their decision, it may prove challenging for them to reverse course. The fact remains, however, that even with higher oil prices, the US is likely to see gas prices below pre-pandemic levels, thanks to a strong domestic energy sector and additional releases from the Strategic Petroleum Reserve.
i remember when i was driving back from uni to my hometown last year and the price was like $3.20 or something now its at $3.51 
im not surprised tho cuz we've been hearing about this for ages and i know the oil industry can be super volatile. anyway, i guess it's good that theyre trying to support brent crude futures and all but like, US drivers are gonna have to suffer 
on a side note tho, did u hear that there might be another hurricane affecting the gulf coast soon? that would really push prices up 
. I mean, they've done it before, and if they're motivated by their decision, it could be tough for them to backtrack 
. But, let's be real, higher gas prices are gonna hurt US drivers 
. I'm just not sure how long it'll take for prices to drop back down, especially if there are any disruptions in global energy markets 
. On the other hand, our domestic energy sector and Strategic Petroleum Reserve should help keep prices in check 
. Still, $3.80 to $3.90 per gallon? That's just crazy expensive 
!
. Like they weren't planning for it already. I'm sure OPEC+ was all like "Hey, let's just throw in a massive oil cut to shock the system" and now everyone's gonna be scrambling to fill up their tanks at $3.80+ 
. I'm sure it'll just make people grumpy and stuff, but hey, who needs affordable gas when you can have a strong economy, right? 
Plus, we've seen prices go up before and come back down just as quickly without any major disruptions happening 
. This OPEC+ move makes me nervous - I mean, who wants to shell out $4+ per gallon for gas? 
. My cousin lives out in LA and said he's already feeling the pinch - it's gonna be a tough summer for sure 
OPEC+ just dropped 1.6 million barrels of oil daily and we're gonna pay for it 
And did you see that the RBOB wholesale gasoline price has risen by about 8 cents? That's a huge jump! 
.
It feels like they're playing with fire...
especially those who have been tight on their budgets lately. Higher gas prices are never easy to swallow 
, and Tom Kloza's predicting a $3.80 to $3.90 surge in gas prices by summer - that's some serious inflationary pressure 
.
.
they're literally cutting production & watchin gas prices rise...it's like u play with a fire, but then u say "oh its just a little burn" 
but for us it's more like a big ol' wildfire that we cant stop 
It's like, you're already struggling with so much stuff, and then you find out your gas bill is gonna be way higher?